the funders may have specific total funding targets below filling their near term RFMF, and the closer to those targets, the less they give.
For example, the funders might aim for a marginal utility of 6 utilons per dollar, so using your example numbers, they would only want to fund the org up to $800K. And if someone else is already giving $100K, they would only want to give $700K.
My guess would be that in practice, funders probably aren’t thinking too much about a curve of marginal utility per dollar but are more thinking something like: Is this org working on an important problem? Do they need more money to continue/expand this particular work? What percent of that funding gap do we want to fill?
But this is just my speculation about how I imagine people would make grants when they have lots of charities to review and lots of money to disburse, with limited time to investigate each one in depth. If they have time to review more detailed plans about what each incremental chunk of money would be spent on, they might get closer to the marginal-utility approach you mention.
Great point! Michael said something similar:
For example, the funders might aim for a marginal utility of 6 utilons per dollar, so using your example numbers, they would only want to fund the org up to $800K. And if someone else is already giving $100K, they would only want to give $700K.
My guess would be that in practice, funders probably aren’t thinking too much about a curve of marginal utility per dollar but are more thinking something like: Is this org working on an important problem? Do they need more money to continue/expand this particular work? What percent of that funding gap do we want to fill?
But this is just my speculation about how I imagine people would make grants when they have lots of charities to review and lots of money to disburse, with limited time to investigate each one in depth. If they have time to review more detailed plans about what each incremental chunk of money would be spent on, they might get closer to the marginal-utility approach you mention.